Singapore

SG MAS to warn banks on SIBOR rigging

Following an 11-month review on how benchmark interest rates are set, the Monetary Authority of Singapore (MAS) plans to issue a warning to banks as early as today, according to sources.

On the same day, the Singapore Foreign Exchange Market Committee (SFEMC), which includes banks and MAS, will separately announce changes on how the rates are determined, said two of the sources yesterday.

The city-state’s review into possible rigging of the Singapore Interbank Offered Rate (SIBOR) follows a worldwide crackdown on benchmark rate manipulation by brokers and banks.

Recently, UK and US financial watchdogs slapped a US$2.5 billion (S$3.14 billion) fine on UBS AG, Barclays and Royal Bank of Scotland Group for manipulating the London Interbank Offered Rate (LIBOR).

“There is a sense that financial firms and markets have grown too big and fast, and have cut corners in virtually all countries,” said Sandy Mehta, Chief Executive of investment advisory firm Value Investment Principals.

“Everyone’s image has been tarnished as regulators are struggling to keep up with markets.”

However, MAS will not impose criminal sanctions on the banks or any employees, said sources.

SIBOR determines the interest rates of debt such as mortgages and commercial term loans. It is calculated on behalf of the Association of Banks in Singapore based on submissions by lenders such as New York-based JPMorgan Chase & Co, London-based Standard Chartered and Singapore’s DBS Group Holdings.

Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@allproperty.com.sg